India’s upcoming UPI merchant fee could change how forex and crypto platforms process rupee deposits without creating a new tax on individual trades.
From October 15, 2026, qualifying UPI merchant payments above Rs. 2,000 will attract a 0.4% merchant discount rate (MDR). The charge is capped at Rs. 300 for transactions of Rs. 75,000 or more.
According to India’s finance ministry, the MDR is a merchant payment charge rather than a tax on forex or cryptocurrency trading. Person-to-person UPI transfers will remain exempt, while merchant payments of Rs. 2,000 or less will remain free.
Small merchants receiving up to Rs. 1 lakh monthly through UPI QR payments are also exempt. The government estimates that 96% of merchant transactions will remain unaffected.
Finance Minister Nirmala Sitharaman addressed confusion surrounding the measure, saying, “MDR charges on UPI transactions above Rs. 2,000 are neither a Tax nor a Cess.”
Forex and Crypto Deposits Face Classification Questions
For traders, the key issue is how deposits to brokers and exchanges are classified. Payments involving mutual funds, securities, stockbrokers and dealers face a separate 0.02% MDR, capped at Rs. 300. However, published guidance does not explicitly place forex brokers or crypto exchanges in this category.
Traders therefore cannot assume every INR deposit will incur the 0.4% charge. Crypto platforms face regulatory challenges. According to a government announcement, India’s Financial Intelligence Unit issued notices to 15 crypto platforms over alleged non-compliance with requirements under the Prevention of Money Laundering Act and requested that their apps and websites be removed from public access.
What Traders Should Watch
The finance ministry states that customers should not directly pay MDR, while banks are expected to prevent merchants from passing it on as a payment fee.
The practical impact will therefore depend on how brokers, exchanges and payment providers respond. Platforms could revise deposit methods or absorb costs. Until they publish their arrangements, claims of higher trading fees, slower withdrawals or reduced liquidity remain uncertain. For traders, platform notices on INR deposits and withdrawals will provide the clearest indication of impact.
Also Read: India Crypto QR Code Scam: How Fake Officials Use Digital Wallets, What Users Should Watch For
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
